Powell Speaks ES/SPY Weekly Analysis of Oct 4Today because I knew Powell was speaking I decided to hold off on my analysis until this afternoon. From the weekly timeframe perspective, it looks like ES and SPY would rather continue to run up. But as we zoom in closer to the daily chart we also take note of the support level gap below. As we ended last week’s trading session the candlesticks began to exhaust and form a flag pattern (order block) or continuation pattern. Not knowing if Powell speaking today would drop ES/SPY in that gap I betted on a short term put as we usually have an impulse reaction of fear on the days that Powell is speaking! Powell can also quickly turn the market around depending on his responses to questions from the audience at these public appearances.
Now by analyzing the 15 min chart, we quickly see how price dropped at first when Powell began speaking (2:15PM EST candlestick) immediately turned back around to head up (2:30PM EST candlestick), once it was confirmed we were likely to receive more interest rate cuts in the near future.
By zooming back out and looking at the 2HR chart, we see that the closing candle of the day ran up so much, to where it appears that the next candle may break out the top and create another all time high.
As we look forward to the week ahead, we are anticipating the following inflation data reports to be released:
Tuesday Oct 1 - ISM Manufacturing PMI & JOLTS Job Openings
Wednesday Oct 2 - ADP Non-Farm Employment Change
Thursday Oct 3 - Unemployment Claims & ISM Services PMI
Friday Oct 4 - Average Hourly Earnings, Non-Farm Employment Change, & Unemployment Rate
With these reports and the anticipation for a lower Federal Fund Rate, we are likely to see a lot volatile action, like we just saw today! Trade safe this week!
